Cboe Plummets Most On Record Amid VIX Fallout

It looks like the market’s jitters about the VIX are being taken out on the exchange operator at this point because have a look at this:

So just to put that in perspective … well, actually there really isn’t any perspective here, because look:

As Bloomberg reminds you, Cboe owns the VIX intellectual property, which means folks are nervous about what the fallout might ultimately be from yesterday’s insanity.

This morning, Credit Suisse said it will liquidate everyone’s favorite short vol. doomsday vehicle and Horizons also halted its VIX ETF, citing “an unexpected level of volatility” which has “impaired the trading of the underlying derivatives used by many VIX-related exchange traded products.”

Writing about a subject is the best
way to educate yourself about it, and when I flick through past work I remember how much
they taught me, if no one else. Mainly they taught me that I didn’t know very much. But they
also taught me that most other people didn’t know much either. Thus, some key themes
which stand out include the illusory control of policy makers, the presumed knowledge of
those looking to them to actively do good, the ease with which we fool ourselves, and how
best to protect capital in the face of such unavoidable uncertainty. -- Dylan Grice